Gazprom, GDF in gas supply deal to 'improve' Europe's security of supply
4 Mar 2010
Paris – Gazprom is to supply to GDF SUEZ up to 1.5bn cubic meters of additional gas per year from 2015 via its Nord Stream project under a deal, which will also see GDF SUEZ take a 9% capital holding in Nord Stream AG before the start of the gas pipeline construction.
The Nord Stream is a strategically important pipeline for Europe, according to Gazprom chairman Alexey Miller, who said the value of the project was difficult to overestimate, as it will be an additional guarantor of energy security for millions of consumers and give them confidence in the future.
“Together with our counterparts from GDF SUEZ, we believe that the Nord Stream will not merely strengthen cooperation between our companies, but will also help develop the energy sector of the entire continent and be another factor in the success of the long-term Russian-French partnership in the gas industry,” added Miller.
For GDF SUEZ, Gérard Mestrallet, CEO, added: “By entering Nord Stream AG and increasing its gas purchase from Russia, GDF SUEZ aims at contributing to Europe’s security of supply including North West Europe where the Group is one the major power producers and holds a large portfolio of final power and gas customers.”
The Nord Stream is a new route for Russian gas export to Europe. Going through the waters of the Baltic Sea from the Portovaya Bay (near Vyborg) to the German coast (near Greifswald) the gas pipeline will stretch for around 1,200km. The first Nord Stream string with a capacity of 27.5bn cubic meters per year is projected to be commissioned in 2011. The construction of the second string of the gas pipeline will allow increasing gas capacity to 55bn cubic meters.
The project is being implemented by the joint venture Nord Stream AG, set up for the planning, construction and further operation of the offshore gas pipeline. Stakes in Nord Stream AG are currently distributed as follows: Gazprom holds 51%, Wintershall Holding and E.ON Ruhrgas hold 20% each, and Gasunie holds 9%.
Co-operation in the gas supply sector between Gazprom and GDF SUEZ started in September 1975. In total, more than 300 billion cubic meters of natural gas has been supplied to GDF SUEZ. In 2006, Gazprom and GDF SUEZ signed an agreement on the renewal of their natural gas supply contracts until 2030.
The parties also agreed on additional gas supplies of 2.5bn cubic meters per year to GDF SUEZ to be shipped mainly via the Nord Stream gas pipeline. From October 2007 Gazprom gained an opportunity to supply up to 1.5bn cubic meters of Russian gas per year directly to French end consumers.
Gazprom’s richest resources of natural gas account for 17% and about 70% of the world’s and Russian gas reserves, respectively. Gazprom produces about 17% of the world’s natural gas; the company’s share in the Russian gas production market is above 80%.
